Case T-496/10

Bank Mellat

v

Council of the European Union

‛Common foreign and security policy — Restrictive measures against Iran with the aim of preventing nuclear proliferation — Freezing of funds — Obligation to state reasons — Rights of the defence — Right to effective judicial protection — Manifest error of assessment’

Summary — Judgment of the General Court (Fourth Chamber), 29 January 2013

1. Procedure — Decision or regulation replacing the contested measure in the course of proceedings — New factor — Extension of the initial pleadings

2. Fundamental rights — Rights of defence — Right to effective judicial protection — Relied on by a legal person regarded as an emanation of a non-Member State — Lawfulness — Procedural rules laid down for actions before the European Court of Human Rights — Inadmissibility of applications brought by governmental organisations — Applicability before the Courts of the European Union — Excluded

   (Charter of Fundamental Rights of the European Union, Arts 17, 41 and 47)

3. Acts of the institutions — Statement of reasons — Obligation — Scope — Restrictive measures against Iran — Freezing of funds of persons, entities or bodies engaged in or supporting nuclear proliferation — Minimum requirements

   (Art. 296, second para., TFEU; Council Regulations No 423/2007, Art. 15(3), No 961/2010, Art. 36(3), and No 267/2012, Art. 46(3); Council Decision 2010/413, Art. 24(3))

4. EU law — Principles — Rights of defence — Right to effective judicial protection — Restrictive measures against Iran — Freezing of funds of persons, entities or bodies engaged in or supporting nuclear proliferation — Obligation to disclose incriminating evidence — Scope

   (Charter of Fundamental Rights of the European Union, Art. 47; Council Common Position No 2001/931, Art. 1(4) and (6))

5. EU law — Principles — Rights of defence — Restrictive measures against Iran — Freezing of funds of persons, entities or bodies engaged in or supporting nuclear proliferation — Right of access to documents — Right subject to request for access being made to the Council

   (Council Regulations No 423/2007, No 961/2010 and No 267/2012; Council Decision 2010/413)

6. European Union — Common foreign and security policy — Restrictive measures against Iran — Freezing of funds of persons, entities or bodies engaged in or supporting nuclear proliferation — Action for annulment brought by an entity to which a fund-freezing decision applies — Burden of proof — Judicial review

   (Council Regulations No 423/2007, No 668/2010, No 961/2010, No 1245/2011 and No 267/2012; Council Decision 2010/413)

7. European Union — Common foreign and security policy — Restrictive measures against Iran — Freezing of funds of persons, entities or bodies engaged in or supporting nuclear proliferation — European Union measures imposing freezing of funds — Territorial scope

   (Council Regulations No 423/2007, Art. 18, No 961/2010, Art. 39, and No 267/2012, Art. 49)

1.  See the text of the judgment.

   (see para. 32)

2.  EU law does not contain any rule which states that legal persons who are emanations of non-Member States may not rely, to their advantage, on the protections and guarantees of fundamental rights. On the contrary, Articles 17, 41 and 47 of the Charter of Fundamental Rights of the European Union guarantee the rights of ‘everyone’, a wording which includes legal persons. Those rights may therefore be relied upon by those persons before the Courts of the European Union in so far as those rights are compatible with their status as legal persons.

   Nor can such an exclusion from the benefit of fundamental rights be based on Article 34 of the European Convention for the Protection of Human Rights, the effect of which is that applications submitted by governmental organisations to the European Court of Human Rights are not admissible.

   (see paras 36-38, 41)

3.  See the text of the judgment.

   (see paras 49-51)

4.  The principle of respect for the rights of the defence requires, first, that the entity concerned must be informed of the evidence adduced against it to justify the measure adversely affecting it. Secondly, that entity must be afforded the opportunity effectively to make known its view on that evidence.

   Consequently, as regards an initial measure whereby the funds of an entity are frozen, unless there are compelling reasons touching on the security of the European Union or of its Member States or the conduct of their international relations which preclude it, the evidence adduced against that entity should be disclosed to it either concomitantly with or as soon as possible after the adoption of the measure concerned. At the request of the entity concerned, it also has the right to make known its view on that evidence after the adoption of the measure. Subject to the same proviso, any subsequent decision to freeze funds must as a general rule be preceded by disclosure of further evidence adduced against the entity concerned and a further opportunity for it to make known its view.

   Accordingly, the disclosure of a proposal for the adoption of a restrictive measure imposing a freezing of funds to the person concerned after expiry of the period prescribed for the submission of that person’s observations does not provide access to the information in the file in good time, and thereby infringes the rights of the defence.

   Further, as regards the principle of effective judicial protection, the effectiveness of judicial review means that the European Union authority in question is bound to disclose the grounds for a restrictive measure to the entity concerned, so far as possible, either when that measure is adopted or, at the very least, as swiftly as possible after that decision, in order to enable the entity concerned to exercise, within the periods prescribed, its right to bring an action. Observance of that obligation to disclose the grounds is necessary both to enable the persons to whom restrictive measures are addressed to defend their rights in the best possible conditions and to decide, with full knowledge of the relevant facts, whether there is any point in their applying to the Courts of the European Union, and also to put the latter fully in a position to carry out the review of the lawfulness of the measure in question which is the duty of those courts.

   Thus, the vagueness of the grounds justifying the adoption of a decision to freeze funds and the late notification of the proposal for the adoption of that decision constitute an infringement of the right of the person to whom that decision is addressed to effective judicial protection.

   (see paras 53, 54, 56, 85, 96, 105)

5.  See the text of the judgment.

   (see para. 55)

6.  See the text of the judgment.

   (see para. 111)

7.  See the text of the judgment.

   (see paras 122-124)